Supply Chain Sustainability
Supply Chain Management
Accenture aims to enhance its supply chain prowess by acquiring after-sales services provider OnProcess Technology. The deal can create opportunities for both firms, their clients, and the overall supply chain business process services market. Discover the key drivers behind this union and its potential impact in this breaking blog.
Reach out to us directly to discuss this acquisition further.
Accenture’s plan to acquire OnProcess Technology, announced on Oct. 31, 2023, aligns with Accenture’s inorganic growth strategy to expand its supply chain management capabilities. As a leading managed services provider, Accenture provides a wide range of services and solutions in strategy, consulting, technology, business processes, and operations.
OnProcess Technology specializes in after-sales services, one of the fastest-growing supply chain business process services. This segment is expected to grow even further due to its close ties to sustainability and its potential to impact revenue and customer satisfaction directly.
Based on our research and analysis, we view this acquisition as a good business move for Accenture. This is due to the segment’s strong potential and the opportunities it gives Accenture to leverage OnProcess Technology’s after-sales capabilities to enhance its supply chain offerings. Read on to learn more.
Three main factors are behind this deal. Let’s explore each further.
Supply Chain Management Business Process Services (SCM BPS) has grown 15-20% over the past few years. The market encompasses four major processes: planning, making/manufacturing, delivery, and one of the fastest growth areas – after-sales services. Though each company has the strength and capabilities to manage aspects of after-sales services, the combined entity enhances Accenture’s end-to-end supply chain coverage by augmenting existing capabilities and filling specific gaps within their portfolios.
While OnProcess specializes in after-sales services, it lacks the operational scale and broader end-to-end capabilities Accenture offers. Accenture holds a Leader position in the Everest Group SCM BPS PEAK Matrix® Assessment 2023. OnProcess Technology is also a prominent Major Contender, supported by a strong vision and focused investment.
Combining the capabilities of both firms could provide enterprises with a one-stop supply chain solution. Additionally, OnProcess Technology’s existing clients can access Accenture’s broader capabilities in supply chain and other synergist functions. This will give clients a comprehensive ecosystem to seamlessly access their business process and IT services needs.
Exhibit 1 shows the findings from the 2023 SCM BPS PEAK Matrix® Assessment, where Accenture and OnProcess Technology are positioned strongly.
The combined entity will extend Accenture’s leadership position with strong end-to-end supply chain management services.
This exhibit shows a high-level view of Accenture’s and OnProcess Technology’s key capabilities/offerings
Continuing its concerted efforts to boost its supply chain capabilities both organically and inorganically, Accenture has made significant investments and more than 40 acquisitions in recent years. This latest acquisition will significantly boost and enhance Accenture’s after-sales capabilities within the supply chain.
The below exhibit outlines Accenture’s inorganic investments since May 2020.
Accenture’s supply chain investments
Accenture has invested in the entire supply chain value chain across plan, make/manufacture, deliver, and after-sales services and has also acquired multiple sustainability-focused companies in the past few years to meet clients’ demands in this space.
OnProcess Technology has also been in a growth phase over the last couple of years. It has significantly invested in developing its after-sales capabilities, including appointing a new executive team, sustainability head, and chief product officer, launching a cloud-based platform, and expanding in regions such as Latin America.
The exhibit below outlines OnProcess Technology’s key milestones since its inception.
OnProcess Technology’s key milestones since inception
Given the firms’ investment appetite and strategic alignment, this latest acquisition is a logical
step to strengthen Accenture’s positioning in the supply chain market.
After-sales services is the fastest-growing SCM BPS segment, with a forecasted compound annual growth rate of about 20%. Many SCM BPS providers have tried to develop end-to-end after-sales capabilities, yet none have fully achieved this. The OnProcess Technology acquisition will help Accenture fill its missing after-sales services capability gaps and pave the way for comprehensive supply chain management capabilities.
Furthermore, OnProcess Technology has a large number of long-term clients, many with relationships spanning more than eight years. This gives Accenture opportunities to expand its existing engagement scope in established accounts with high customer satisfaction.
Additionally, more than two-thirds of OnProcess Technology’s revenue comes from clients in the high-tech and technology sector, one of the fastest-growing segments within supply chain management BPS. This sector is focused on sustainability and enabling circular supply chains through repairing, recycling, and refurbishing electronic devices. Accenture’s acquisition of OnProcess Technology opens access to an attractive client base to support its broader vision of fostering sustainable supply chains.
The combined entity will address enterprises’ demand for end-to-end supply chain services.
In the rapidly evolving SCM market, demand for end-to-end SCM offerings is on the rise. Given the urgency to rapidly develop capabilities, many providers are expanding inorganically to gain a head start in capturing the growing market. With the acquisition of OnProcess Technology, Accenture stands to augment its ability to offer integrated SCM services and customized after-sales offerings at scale to clients.
If you have questions or would like to discuss supply chain management strategies, trends, or insights, reach out to Vignesh K, [email protected], or Amir Khan, [email protected].
Catch our webinar, Adapting to Change: Boost Value in Outsourcing and Software Contracts When Uncertainty Persists, to learn how enterprises can drive more savings from their outsourcing contracts.
The global multi-process Finance and Accounting Outsourcing (FAO) market continued to grow at a steady rate of 11-13% in 2022 and is expected to continue this growth trajectory for the next three years. Surging inflation, the recessionary environment, and geopolitical instability, coupled with the volatility that the pandemic left the enterprises in, have increased enterprises’ openness to leverage third-party service provider support for their finance functions. The strategic focus of service providers is becoming more elevated as they emphasize upstream F&A operations alongside routine tasks. This change underlines how corporations are realizing the strategic value of F&A. At the same time, there is a growing focus on non-traditional F&A areas, including risk management, compliance, sustainability, and data & analytics. Notably, cognitive technologies have moved from pilot stages to widespread usage, denoting a considerable change in the approach to and execution of F&A activities. Advisory services are becoming prominent, with service providers supporting enterprises to successfully navigate through complex financial environments. These trends are driving incremental changes in the commercial construct of FAO deals, indicating an evolving and value-driven industry landscape.
In this research, we focus on:
Scope
The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.
Procurement Outsourcing (PO) providers are seen as strategic partners by organizations and are playing a critical role in helping them navigate the challenges posed by macroeconomic uncertainties and inflationary pressures by driving cost reduction and enhancing efficiencies. With the increasing willingness to outsource judgment-intensive strategic procurement processes, service providers are building strong domain expertise and digital transformation capabilities to drive value acceleration for organizations. Service providers are offering a comprehensive procurement digital ecosystem with advanced technology capabilities comprising end-to-end platform solutions, best-of-breed suites, and point solutions by leveraging in-house capabilities, partnership ecosystems, and targeted investments. Leading providers are also investing in developing capabilities and solutions in emerging areas such as sustainability, risk management, and direct spend management.
What is in this PEAK Matrix® Report
This report examines the:
Scope:
The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.
Enterprises have been increasingly turning to P&C insurance BPS providers during the recession to address elevated operating costs resulting from heightened inflation, which has led to increased claims expenses and rate adjustments for various P&C products. Cost reduction has once again become the foremost reason for outsourcing, along with the pursuit of operational efficiency to achieve improved business results. Additionally, there have also been delays in decision making from key enterprise leaders for handing out transformational projects.
Nevertheless, P&C insurance BPS providers are actively seeking opportunities for expansion by enhancing their capabilities in less frequently outsourced areas such as underwriting, actuarial analysis, and claims processing, all of which represent substantial cost centers for enterprises. Additionally, they are presenting transformational initiatives to initial adopters of outsourcing who have yet to fully realize the advantages of partnering with BPS providers to boost efficiency and cut costs, enabling them to sustain and improve growth in a challenging environment.
What is in this PEAK Matrix® Report
This report features 21 P&C service provider profiles, and includes:
Scope:
The PEAK Matrix® provides an objective, data-driven assessment of service and technology providers based on their overall capability and market impact across different global services markets, classifying them into three categories: Leaders, Major Contenders, and Aspirants.
Intelligent Automation
Intelligent Automation
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